Editorial Articles

Vincent Labey, CEO of Aedgency, looks at the online advertising landscape and asks how marketers can demonstrate the benefits of behavioural targeting to consumers.
Behavioural targeting has been much criticised in the press recently, particularly as the EU prepares to take the British Government to court for its failure to act on BT’s unlawful testing of the Phorm platform. However, beyond the media witch-hunt there is evidence to suggest that the public is willing to embrace targeted advertising as long as it’s implemented to fit their needs.

There is a general acceptance, amongst consumers and government, that advertising offers the best means to provide free access to the internet. Research conducted by the Internet Advertising Bureau and Toluna in February 2009 showed that 85% of the 2000 UK consumers polled would rather see ads on websites rather than pay a premium for access. After all, the advertising model has become the standard for the consumption for free to air television and this was equally contentious when the commercially funded ITV began broadcasting in 1955. 

Advertisers clearly recognise the benefits offered by behavioural advertising, particularly during a recession since it effectively solves the Wanamaker conundrum – “Half the money I spend on advertising is wasted; the trouble is I don't know which half." Figures from Forrester Research speak for themselves - 58% of marketers polled expect to adapt behavioural targeting in 2009.

However there is currently no single EU directive regulating the industry, the EU’s Data Protection Directive was agreed in 1995, it is tailored to nascent internet and is subsequently largely outdated. The IAB issued a set of good practice principles for behavioural targeting in March 2009, while these gained the support of major players in the online advertising space these are entirely self-regulated. The IAB guidelines require participating companies to offer consumers the choice to opt-out, but regulators would much prefer that consumers should opt-in to services.

The industry currently lacks cohesion that is much needed to restore public confidence and facilitate the next generation of online marketing. Consumer attitudes to online ads have changed since 1995 and brands need to offer consumers more than ads.

Many current digital advertising practices are mired in the past, thankfully pop-ups are largely a bad memory but web banners are still prevalent - more than ten years after usability firm NN/g identified "banner blindness" in eye-tracking testing! The general public are now much more sophisticated in their use of the internet and have become adept at seeking out the best deals online. Research from Tickbox.net conducted in March 2008 revealed that 70% of UK consumers use a search engine, a cashback community or a price comparison site before making a purchase online. It's clear price is the defining factor in the purchasing behaviour of nearly three quarters of e-shoppers, so it would make sense for brands to shift emphasis from ads to offers.

In fact the use of permission-based smart targeting to serve relevant deals could be welcomed by e-buyers. A recent poll of 1,000 UK consumers by Coremetrics revealed 45% of would accept behavioural targeting provided they had the option to opt-out and 35% felt it would offer benefits, such as saving them money and time.

If the consumer appreciates the advantages of smart targeting and the terms of the agreement are made fully transparent from the outset through an opt-in mechanism then it becomes a positive two-way relationship. Aedgency’s own business model demonstrates that opt-in can work and to date it has signed up over 14 million e-shoppers to its contextual offer services across Europe.

However, in order to retain those users that do sign up to behavioural targeting it is necessary to provide them with a compelling experience that enhances their online shopping experience. The experience should be unintrusive, yet helpful – a kind of virtual personal shopper to guide shoppers to the best deals. The first step is to establish a dialogue with the user as soon as he/she has signed up to establish areas of interest to complement data gleaned from surfing habits.

Behavioural targeting should add value at each stage of the buying process; purchase route mapping should establish what deals are first appropriate, what supplementary offers would make a purchase more likely and what add-ons would be valuable at checkout. The most effective routes to sale should also be identified through smart targeting, whether this be contextual offers, email marketing etc. For example, someone searching for flights to Florida could be offered up value-added deals from carriers in their toolbar. Should they click through to a site but not buy, a discount code or free upgrade can be emailed to them within 24 hours and if they convert hotel deals or discounted theme park tickets are offered at point of sale.

Ultimately behavioural targeting benefits both consumers and brands, e-shoppers get the best deals and since advertisers are able to track conversions they only pay for results. However, before it can become an digital marketing standard it needs to lose its current stigma, governments and behavioural advertising providers need to work together to define industry standards and regain the trust of consumers.

Author: Vincent Labey, CEO, Aedgency